Localising Sovereign Debt: The Rise of Local Currency Bond Markets in Sub-Saharan Africa

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Main author: Dafe, Florence
Other authors: Essers, Dennis
Volz, Ulrich
Format: Journal Article           
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id eprints-24715
recordtype eprints
institution SOAS, University of London
collection SOAS Research Online
language English
language_search English
description This paper analyses the development of local currency sovereign bond markets (LCBMs) in sub‐Saharan Africa (SSA), a potentially important source of longer‐term public finance. We make two contributions to the literature. First, we build a novel data set comprising 28 SSA countries for the period 2000–14 to uncover the main correlates of LCBM capitalisation, of local currency bond (LCB) tenors and of LCB issue yields. We find that LCBM capitalisation in SSA relates to politico‐institutional factors, overall financial development and financial system structure. For LCB tenors and issue yields, inflation levels matter too. Second, we complement our econometric analysis with qualitative case studies of Kenya and Nigeria, where we further investigate the drivers of LCBM development and place LCBMs in a broader public debt context. While we document the increasing importance of LCBMs in SSA, we also highlight new vulnerabilities, including those related to investor base composition.
format Journal Article
author Dafe, Florence
author_facet Dafe, Florence
Essers, Dennis
Volz, Ulrich
authorStr Dafe, Florence
author_letter Dafe, Florence
author2 Essers, Dennis
Volz, Ulrich
author2Str Essers, Dennis
Volz, Ulrich
title Localising Sovereign Debt: The Rise of Local Currency Bond Markets in Sub-Saharan Africa
publisher Wiley
publishDate 2018
url https://eprints.soas.ac.uk/24715/

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